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Fed's New Climate Change Committee Could Help Western Communities Gauge Risk

The Trap Fire burning about 9 miles northwest of Stanley, Idaho, in the fall of 2020.

The U.S. Federal Reserve has created its first committee to research the financial risks posed by climate change.

Called the Supervision Climate Committee, the central bank announced Monday that it'd be headed by a senior official, stocked with senior staff and "will further build the Federal Reserve's capacity to understand the potential implications of climate change for financial institutions, infrastructure, and markets."

For some, the move seems a bit delayed. 

"It's a fairly obvious thing for the Fed to look into, and I'm surprised it took them this long," said Ray Rasker, an economist at the Montana-based nonprofit Headwaters Economics.

Still, Rasker said Federal Reserve research is highly revered, so any conclusions it makes could help Western communities understand just how much is at stake when it comes to climate change. He said Western states need to consider things like insurance and their communities' ability to get bonds.

"Whether it's a preventative project, like something to deal with flooding, or whether it's parks and open space, or building a new school, is climate change going to affect the bonding capacity of municipalities?" Rasker asked. "I think it will."

The Federal Reserve Board's Randal K. Quarles said in a statement that the SCC will "build on our climate change work already underway across the Federal Reserve System, and help us take a careful, thoughtful, and transparent approach to analyzing these potential risks."

This story was produced by the Mountain West News Bureau, a collaboration between Wyoming Public Media, Boise State Public Radio in Idaho, KUNR in Nevada, the O'Connor Center for the Rocky Mountain West in Montana, KUNC in Colorado, KUNM in New Mexico, with support from affiliate stations across the region. Funding for the Mountain West News Bureau is provided in part by the Corporation for Public Broadcasting.

I'm the regional reporter with the Mountain West News Bureau at Boise State Public Radio.